Tuesday commentary: Collecting taxes on native tobacco sales will help NY, says Madison County official

Lauren Long/The Post-Standard/2010 MIKE HOPPER,of Rome, completes a sale of cigarettes for Sue Beadore, of Glenfield, at the Verona SavOn store, which is run by the Oneida Indian Nation.

By John Becker

The Second Circuit of the U.S. Court of Appeals recently threw out a legal injunction that had prevented New York state from enforcing a law that requires collection of taxes on cigarettes sold on reservations to non-natives.

The court’s decision is a major victory for the state of New York and its long-suffering taxpayers. The inability to enforce the law and collect this tax has cost the state and counties across the state, including Madison County, hundreds of millions of dollars in tax revenues. In fact, based on reported cigarette volumes sold by the Oneida Indian Nation in 2009, the amount of sales and excise taxes due for tobacco sales that year alone totaled approximately $51 million.

Now, after almost 20 years of failure to enforce New York state law, Gov. Andrew Cuomo has decided to do what the previous three governors before him either couldn’t or wouldn’t do — and that’s enforce the law and collect the tax.

The latest ruling, coupled with Cuomo’s unwavering commitment to enforce the law, will lead to significant revenue flowing to the state and county coffers. This year’s enacted state budget projects that $130 million would come to the state as a result of collection. In Madison County, this new revenue will allow us to make necessary investments in our emergency communications system and lower the property tax burden on residents.

This ruling is also a huge victory for all the retailers and convenience stores that have been playing by the rules, following the law and collecting taxes on cigarette sales. New York has the nation’s highest cigarette taxes, giving Native American retailers a huge built-in advantage over local non-Indian competitors. Now, finally, there will be a level playing field when it comes to tobacco sales.

Unfortunately, just one day after the Federal Court of Appeals ruled New York could finally move forward (after 17 years of litigation), Seneca Indian Nation lawyers sought to stall the ruling through a temporary restraining order. This latest attempt by the Native Americans to delay the inevitable was to claim that the state Department of Taxation and Finance moved forward with issuing regulations to collect the taxes without “proper public input.”

This is a baseless claim. And I’m sure that the hundreds of small businesses and taxpayers — who for years have argued this case in public forums, held press conferences, circulated petitions, written letters, given testimony at public hearings and traveled to both Albany and Washington, D.C., to make our case — share my opinion.

While the recent Erie County State Supreme Court’s temporary restraining order was disappointing, it is only in effect until Wednesday and does not alter this far-reaching and important federal court decision. We are very confident that at the beginning of next month the state will be given the green light to begin collecting the tax.

More importantly, because of Cuomo’s unflinching commitment to do what is
right for the law-abiding taxpayers of this state, we believe that the end of this saga is near. Cuomo won’t back down from collecting the tax, and New Yorkers rightly expect and deserve nothing less. I applaud Cuomo for his continued commitment to close this seemingly never-ending battle and urge taxpayers to express their support.